How much would the real rate of interest be if the nominal interest rate were 12 percent and the expected rate of inflation were 7 percent?
What will be an ideal response?
12 - 7 = 5 percent
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If the cross-price elasticity of demand for computers and software is negative, this means the two goods are
A) normal. B) inferior. C) substitutes. D) complements.
"Under floating rates, the economy is more vulnerable to shocks coming from the domestic money market." Discuss
What will be an ideal response?
Discuss the controversy surrounding affirmative action. How does this controversy illustrate the trade-off between equality and efficiency?
What will be an ideal response?
If a change in the tax laws leads to a $100 billion decrease in tax revenue, then aggregate demand
A) increases by $100 billion. B) increases by less than $100 billion. C) increases by more than $100 billion. D) decreases by $100 billion. E) decreases by more than $100 billion.